CHINA’S EV CHARGING INFRASTRUCTURE: AMBITIONS AND CHALLENGES
Author: Adrian de Riz
China is the market leader in manufacturing and sales of electric vehicles (EVs) – however, an appropriate infrastructure for EV charging is a critical success factor for the long-term transition to e-mobility. Together with its goal to have 5 million EVs on Chinese roads by 2020, the Chinese government plans to have 4,8 million charging piles installed by 2020. The following chart shows charging point operators that are most prominent in the Chinese online space:
The State Grid Cooperation, a Chinese state-owned enterprise, has the monopoly on highway EV charging. Off the highway, charging infrastructure mostly consists of charging stations operated by private companies. Individual home chargers and public-private partnerships (PPPs) complete the picture.
Currently, China has around 300,000 public charging piles which are available for all EV users. Additionally, 240,000 private charging piles were registered in 2017. As the following chart shows, the number of EVs on Chinese roads by far exceeds the number of public charging stations available. To reach the target ratio of 1:1, China has to either intensively build up new public charging stations or look for alternative charging solutions.
Private solutions are too clustered and isolated for large-scale adoption
Many private companies are spotting the opportunity, converting fuel stations and installing charging piles in shopping mall parking spots. However, their solutions also still need to reach mass acceptance amongst consumers. The following extracts from Weibo discuss current shortcomings of the charging infrastructure in China:
Buying an EV in China is easy, but charging it is difficult. Too few charging piles and too many different charging membership cards.
First of all, most private providers have no interfaces with the governments or between each other. Their solutions are proprietary and often idle. Customers need to register, pay a deposit for each single provider and carry a collection of member cards with them. This fragmentation complicates the usage of EVs in China and stops many consumers from trusting and adopting the new technology:
Its very hard to find EV charging stations in Beijing, one option are underground parking spots in shopping centers. You can drop off your vehicle to an assistant and go shopping or eating while your car is looked after.
Second, urban parking space, which lends itself well for EV charging, is too pricy for private companies. Therefore, most private charging stations are found outside the city center. Thus, drivers are often required to take an additional drive to charge their vehicles outside the city center.
All in all, creating customer value in the private EV charging industry in China is challenging. The research found two possible ways, for private companies to improve their value offerings in China, home charging and private-public partnerships (PPP). These two strategies are presented below.
Homecharging as an alternative for selected wealthy EV owners
Due to the complicated Chinese charging landscape, wealthy EV owners often opt for a private charging pile at home. The following citations illustrate a very positive consumer sentiment towards home chargers.
“我家买的新能源汽车 车库里安装的充电桩 还是挺方便的[嘻嘻-“
My family bought an EV together with a private charging pile in our garage, it is really convenient.
Most cars that are over 300k RMB (after subsidies) are designed for people with private charging piles, who don’t need the fast charging ports, because they can charge their vehicles over the entire night.
Homecharging might not yet be the most common charging option, but it most definitely shows a higher sentiment than the current publicly available charging stations :
Despite the positive sentiment, homecharging is not a universal solution to the charging infrastructure issue:
Most new EV owners now purchase private dedicated charging piles. However, most of the old community members have not the means to buy their own charging infrastructure.
Homecharging levies the heavy investment of the charging pile on the private customer – naturally, not every EV owner can afford purchasing and maintaining his own station. Therefore, the buildup of public charging stations is still necessary and will ensure a wide availability of charging piles for the average consumer.
Private-public partnerships to boost charging across the country
Especially the less wealthy provinces are facing heavy financial burdens, which stops them from achieving the charging infrastructure goals set for 2020.The map below shows the total amount of public charging stations in each region as of the end of 2018. The black dots show an extract of current private-public partnerships for EV infrastructure in China. Especially provinces like Guizhou, which are lagging behind the agenda, or poorer regions like Anhui benefit from these projects.
There is yet no unified framework for PPPs in the EV charging infrastructure. The main objective is to share costs, risks and revenues between public and private partners. The public partner is often responsible for allocating suitable land plots, integrating the piles into the online charging platform and obtaining the construction permission. The private partner generally holds the responsibility for the technical execution of the project. While PPPs are a promising path to build up charging infrastructure in the future, strong government ties will most certainly favor Chinese companies and foreign companies with Chinese JVs, as had already been seen in the case of TGOOD.
Opportunities ahead in the Chinese EV charging landscape
An extensive and mature charging infrastructure is required to realize a mass adoption of EVs. Charging point operators from China and abroad can capitalize on this opportunity in two ways – by winning over Chinese consumers through strong branding and home charging solutions or by partnering with government stakeholders via private-public partnerships. Either way, providers who plan to get a foothold in the Chinese EV charging landscape need to closely monitor consumer sentiment and customer feedback to stay on top of changing consumer preferences and technological advances.
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